English seems to make use of the phrase "Is it not" in questions, as in "Is it not a nice day?" - to which most would reply "Yes". Is this a proper use of the language? Does it have a name?

Firstly, "Is it not a nice day?" is a proper use of English, although it is often contracted to "Isn't it a nice day?" (note the change in word order).

Secondly, this structure is called a Negative Question. Such questions are used:

a) to express surprise:
"Isn't it ready yet? You've had four days to do it."

b) when we expect a positive response:
"Isn't it delicious?"

c) to contradict a previous statement (politely):
"Is it not spelt with a y?"

Such questions are not limited to "Is it not?" They can be made with any verb and in any tense:

Haven't we met somewhere? / Have we not met somewhere?
Don't you like it? / Do you not like it?
Shouldn't we go now? / Should we not go now?
Won't she have finished? / Will she not have finished?
Aren't you being provocative? / Are you not being provocative?